If you’re a savvy individual wanting to grow your net wealth, one strategy that often comes up is setting up a self-managed super fund (SMSF). But with the introduction of the so-called “$3 million super tax”, many are now asking – is it still worth it?
Let’s break down the current state of play, what this new tax means, and whether an SMSF is still a smart choice for building and protecting wealth.
A Sector on the Rise, Not in Retreat
The SMSF sector recently surpassed $1 trillion in total assets, and fund establishment numbers are increasing, particularly among younger professionals and entrepreneurs.
According to the SMSF Association, these new trustees are drawn to greater control, transparency, and the ability to tailor strategies to their personal or family circumstances.
Research from the University of Adelaide backs this momentum: SMSFs outperformed APRA-regulated super funds over the five years to 30 June 2023. These results reinforce the power of active engagement, flexibility, and personalised decision-making.
Understanding the $3 Million Super Tax
The so-called “$3 million super tax” – officially known as Division 296 – is due to take effect from 1 July 2025. It applies an additional 15% tax on the earnings attributed to the portion of a person’s superannuation balance above $3 million.
It’s understandably raised concern among high-net-wealth individuals who are working hard to grow their retirement nest egg. However, it’s important to keep perspective:
- Most SMSFs still hold balances below $3 million
- The tax is on notional earnings, not withdrawals
- With good strategy, its impact can be managed
- The balance threshold is per person, not per fund
In fact, the control and flexibility offered by SMSFs may make them one of the best tools for navigating this tax proactively – through asset reallocation, pension structuring, and smarter estate planning.
SMSF vs Regular Super – What’s the Difference?
With a public super fund, your options are generally limited to a few investment mixes, and you’re removed from the decision-making process. By contrast, an SMSF gives you total control over how your super is invested – whether that’s shares, ETFs, commercial property, private debt, or even your business premises.
This can be especially advantageous for individuals who want to:
- Hold property inside their fund
- Consolidate super with a spouse or family members
- Tailor tax and pension strategies to suit their broader financial plan
- Have more visibility and input into decisions as retirement approaches
Technology and professional support mean you don’t need to be a compliance expert; you just need the right partners.
Is an SMSF Still Worth It?
For individuals looking to build and protect wealth in a more hands-on way, the answer is often yes. Despite the headlines around new tax rules, SMSFs remain a flexible, powerful structure for growing super over the long term, and possibly one of the best ways to manage the very tax rules causing concern.
That said, SMSFs aren’t for everyone. You need the time, interest, or support to make informed decisions. But if you’re motivated to build wealth strategically and want more control over your retirement options, it may be time to explore one seriously.
Ready to Explore Your Options?
At TAG Financial Services, we specialise in helping individuals assess whether an SMSF fits into their broader wealth plan. We offer practical advice, wealth projections, and ongoing support, so you can make smart decisions with confidence.
Thinking about setting up an SMSF but not sure where to start?
Book a discovery call with our team today.
Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2025. Please do not reproduce without the expressed written consent of the author.